In 1897, the day after the First Zionist Congress in Basel, Theodor Herzl, wrote in his diary: "In Basel I founded the State of the Jews." This week, Ariel Sharon should note in his diary: "In Jenin I founded the State of the Palestinians."

Of course, he did not mean to. His intention was to destroy the Palestinian nation, its institutions and leadership, once and for all, leaving only bits and pieces, human wreckage that could be disposed of anywhere.

In practice, something quite different happened. Faced with the onslaught of the biggest military machine in the region and the most modern arms in the world, submerged in a sea of suffering, surrounded by bodies, the Palestinian nation straightened its back as never before.

In the small refugee camp near Jenin, a group of Palestinian fighters from all the organisations gathered for a battle of defence that will be enshrined forever in the hearts of all Arabs. This is the Palestinian Massada, as an Israeli officer called it, alluding to the legendary stand of the remnants of the great Jewish rebellion against Rome in 71 AD.

When the international media cannot be kept out any more and the pictures of horror are published, two possible versions may emerge: Jenin as a story of massacre, a second Sabra and Shatila; and Jenin, the Palestinian Stalingrad, a story of immortal heroism. The second will surely prevail.

Nations are built on myths. I was raised on the myths of Massada and Tel-Chai. They formed the consciousness of the new Hebrew nation. (At Tel-Chai, in 1920, a group of Jewish defenders, led by the one-armed hero Josef Trumpeldor, were killed in an incident with anti-French Syrian fighters.) The myths of Jenin and Arafat's compound in Ramallah will form the consciousness of the new Palestinian nation.

A primitive military robot, who sees everything in terms of fire power and body counts, will not understand this. But Napoleon, a military genius, said that in war, moral considerations account for three quarters, and the balance of force for the other quarter.

How does Sharon's war look in this perspective? As for the actual forces, the balance is clear. A few dozen Israelis killed, many hundreds of Palestinians dead. No destruction in Israel, horrible destruction in the Palestinian towns.

The aim was, so it was claimed, to "destroy the terror infrastructure". This definition is by itself nonsensical: the "terror infrastructure" exists in the souls of millions of Palestinians and tens of millions of Arabs, whose hearts are bursting with rage. The more fighters and suicide bombers are killed, the more fighters and suicide bombers are ready to take their place. We saw the "laboratories of explosives" - sacks of material obtainable in Israeli shops. The Israeli army is proud of discovering tens of them. There will soon be hundreds.

When dozens of wounded people lie in the streets and slowly bleed to death because the army shoots at every moving ambulance, it creates terrible hatred. When the army secretly buries hundreds of bodies of men, women and children, it creates terrible hatred. When tanks destroy houses, topple electricity poles, open water pipes, leave behind thousands of homeless people and cause children to drink from puddles, it causes terrible hatred.

A Palestinian child, who sees all this with his eyes, becomes the suicide bomber of tomorrow. Thus Sharon and his chief of staff, Shaul Mofaz, create the terrorist infrastructure.

In the meantime, they have created the foundations of the Palestinian nation and the Palestinian state. The people saw their fighters in Jenin and believe that they are far greater heroes than the Israeli soldiers, protected inside their tanks. They saw their leader in the historic TV sequence, his face lit by a single candle in his dark, surrounded office, ready for death at any moment, and compare him with the hedonistic Israeli ministers, sitting in their offices far from the battlefront, surrounded by hordes of bodyguards. Thus national pride is engendered.

No good for Israel will come out of this adventure, as no good came out of any of Sharon's previous adventures. The concept was stupid, the implementation cruel, the results will be disastrous. It will not bring peace and security, solve no problem, but it will isolate Israel and endanger the Jews throughout the world.

In the end, only one thing will be remembered: our giant military machine assaulted the small Palestinian people, and the small Palestinian people and its leader held on. In the eyes of the Palestinians, and not only theirs, it will look like a tremendous victory, the victory of a modern David against Goliath.

· Uri Avnery is co-founder of Israel's Gush Shalom (Peace Coalition). Born in Germany, he emigrated to Palestine in 1933 and joined the Irgun underground movement. In 1948, he was a member of an Israeli commando unit and was wounded on the Egyptian front. As a journalist and political activist, he has long been a campaigner for Palestinian rights and in 1982 crossed the frontline to meet Arafat at the height of the siege of Beirut. A supporter of the Oslo peace agreement, he is now a columnist for the Israeli newspaper Ma'ariv, where this article first appeared.